World stock markets, including Indian indices, and oil prices tumbled on Monday with Milan and Seoul falling hardest on growing fears of a coronavirus pandemic, as gold hit a seven-year peak on safe-haven buying, dealers said.
Wall Street stocks plunged in early trading on Monday, joining a global equity selloff on mounting worries that the spread of the new coronavirus will derail global growth. About 10 minutes into trading, the benchmark Dow Jones Industrial Average stood at 28,191.85, down 2.8 per cent or around 800 points. The broad-based S&P 500 dove 2.6 per cent to 3,252.23, while the tech-rich Nasdaq Composite Index sank 3.1 per cent to 9,282.16.
Losses were widespread with the technology, financial and energy sectors all down significantly as news of the infections in Europe, West Asia and Southeast Asia triggered more drastic efforts to stop people from travelling.
“There is burgeoning fear that the shutdown effect that has hit China’s economy is going to take over elsewhere, dealing another blow to global growth, and earnings growth, prospects,” said Briefing.Com analyst Patrick O’Hare.
Indian stock benchmark Sensex on Monday sank nearly 807 points, the second biggest single-day fall this year, tracking sell-offs in global markets as coronavirus cases rose exponentially outside China.
Starting off on a weaker note, the BSE gauge plunged to a day’s low of 40,306.36 after being caught in a panic selling as investors kept fretting over reporting of a large number of new virus cases in South Korea, Italy and Iran.
While, the broader NSE Nifty sank 251.45 points or 2.08 per cent to 11,829.40.
In late morning deals, Milan’s stock market dived almost five per cent following reports of a fourth death amid the COVID-19 epidemic, an 84-year old man in the northern Lombardy region.
It was the third death in Lombardy, where villages have been sealed off and security measures enforced to stem the spread of the disease. Traders’ screens were awash with red elsewhere in Europe too, with Frankfurt falling 3.7 per cent, London losing 3.5 per cent, Madrid down 3.3 per cent and Paris shedding 3.8 per cent.
Brent oil prices slumped four per cent as the burgeoning crisis sparked global energy demand worries.
Conversely, on the London Bullion Market gold surged to USD 1,689.31 per ounce --- a level last seen in January 2013 --- as investors snapped up the precious metal as a safety measure amid the market turbulence.
“Fears over an escalation of the coronavirus outside of China have caused a major retreat in global markets and prompted wild swings in commodity prices,” said AJ Bell investment director Russ Mould.
“Italy’s lockdown, as the country tries to control the worst outbreak of the virus in Europe, has caused investors to panic about how business and society will be affected. A large spike in coronavirus cases in South Korea has also added to market concerns.
“The result is a large sell-off in equities with... Europe and Asia deeply in the red,” Mould added.
Seoul nosedived 3.9 per cent as South Korea announced a surge in COVID-19 infections, while Hong Kong erased 1.8 per cent but Shanghai retreated by only 0.3 per cent.
With the outbreak showing little sign of easing, investors are increasingly concerned it could have a much longer-term impact on the world economy. Traders had been broadly optimistic that the virus -- which has killed nearly 2,600 and infected 80,000 -- was being contained outside China but a spurt of infections and deaths in other countries including South Korea, Italy and Iran has fanned fears of a global outbreak.
On Monday, South Korea said it had 833 cases, making it the world’s worst-hit country outside China, with seven people now dead. President Moon Jae-in raised the virus alert to the highest “red” level.